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VanDLaw
VanDLaw, Attorney
Category: Bankruptcy Law
Satisfied Customers: 833
Experience:  Chapter 7 & 13
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I probably have to file for chapter 13 next year. I have 3

Customer Question

I probably have to file for chapter 13 next year. I have 3 rental properties. Two of which the banks have started the foreclosure process. I also have about $ 60,000 in credit card debt. I hear that the judge can restructure your loan on you second and third property so you can keep it. Is this true even if they are rental properties? How does this work?

Also, I'm about to get about $ 50,000 from an action suit. I'm planning to use this money to survive until I find a job. Can I keep this money if I file for bankruptcy? If not, can I deposit this money on my sister account?

Thanks
Submitted: 8 years ago.
Category: Bankruptcy Law
Expert:  VanDLaw replied 8 years ago.

HelloCustomer

 

First, you must have lived in Florida for six months prior to filing bankruptcy in Florida. Then in order to use Florida bankruptcy exemptions you must have been a resident of the state of Florida for the past two years. If you have not lived in Florida for the past two years you must use the exemptions in the State of your last residence, provided you fit into their residency requirements for bankruptcy. The exemptions are what you get to keep in a bankruptcy, and are not subject to being seized by the Trustee to pay back your creditors.

 

In New Jersey you can elect to take the State exemptions or the Federal exemptions. The Federal exemptions allow a homestead exemption, whereas NJ has no homestead protection at all for real property.

 

In Florida a settlement or proceeds from a lawsuit are subject to being seized by the Trustee in its entirety, and they are as well if you use the Federal Exemptions.

 

If you use the New Jersey state exemptions PERSONAL INJURY SETTLEMENTS AND JURY AWARDS-a payment, not to exceed $18,450, on account of personal bodily injury, not including pain and suffering or compensation for actual pecuniary loss, of the debtor or an individual of whom the debtor is a dependent; or

PAYMENTS FOR LOSS OF FUTURE EARNINGS - a payment in compensation of loss of future earnings of the debtor or an individual of whom the debtor is or was a dependent, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor.

 

So the $50K award you are going to receive will be seized in part by the Trustee if you file bankruptcy within one year of receiving the settlement. The same goes for a Chapter 7.

Bankruptcy does not discharge

  • Alimony
  • Child support
  • Most recent back taxes
  • Most Student loands
  • Recent large purchases of more than $550 for luxury goods bought
    within 90 days of filing
  • Fines or penalties of government agencies
  • Fraudulent debts
  • Cash advances of $825 within 70 days of filing
  •  

    For a Chapter 13 bankruptcy, you'll need a stable income with disposable income (income left over after you pay the bare necessities of life such as shelter, food and utilities). You must have no more than $922,975 in secured debt (debt involving property that your creditor might take if you don't make your payments) and $307,675 in unsecured debt. These amounts are adjusted periodically to reflect changes in the consumer price index. The court filing fee is $274 in every State.

     

    As for the restructure of your loans, you are going to have to convince the Trustee that you have enough disposable income to make the payment plan you get confirmed. If you want to surrender the homes, you may want to consider a Chapter 7, if you meet the means test. The unsecured debt goes away, and if you are current on your main residence you could reaffirm and keep that house. The other properties you could keep but only if you were current on the payments.

    Customer: replied 8 years ago.
    Thank you!! Do I need to be employed to file for Chapter 7 ? Do you have a site that I can check if I pass the means test? Regards
    Expert:  VanDLaw replied 8 years ago.

    No you do not need to be employed, that is just for a Chapter 13.

     

    Try this site for the means test. There are probably many others, I don't advocate one over the other.....but this should give you an idea.

     

    http://www.legalconsumer.com/bankruptcy/means-test/state.php?st=NJ

     

     

    VanDLaw and other Bankruptcy Law Specialists are ready to help you
    Customer: replied 8 years ago.
    thank you!